Morgan Stanley slightly lowered the target price for COSCO SHIPPING Energy to 12 yuan, expecting that next year's supply tightness will support profitability

JP Morgan published a report stating that it maintains an "Overweight" rating on COSCO SHIPPING Energy H shares (01138.HK), with the target price lowered from HKD 13 to HKD 12. The bank maintains a "Neutral" rating on COSCO SHIPPING Energy A shares (600026.SH), with the target price lowered from RMB 14 to RMB 13. The bank believes that although market concerns about existing shipping disruptions may gradually fade, it still expects the profitability of crude oil tankers to remain resilient next year; it recommends buying COSCO SHIPPING Energy H shares at lower levels.

The bank indicated that while industry data estimates global tanker capacity and demand will grow by 2.2% and 1% year-on-year respectively next year, the actual supply balance remains tight. Among them, crude oil tanker demand is expected to grow by 0.9% year-on-year, but supply will only increase by 0.7%, especially for Very Large Crude Carriers (VLCC), where supply and demand are even tighter; at the same time, OPEC's stable production also maintains the related situation.

In addition, carrying capacity also faces structural limitations. Over 20% of tankers globally are over 20 years old, and an increasing number are concentrated in the "shadow fleet," limiting their ability to participate in compliant trade. Geopolitical friction has also further increased carrying demand. As sanctions on vessels from Russia, Iran, and Venezuela expand, approximately 18% to 20% of the global fleet is involved in related non-compliant transportation